> The research is based on a survey of creators for thousands of Kickstarter projects between 2009 and May 2015.
It would be crazy to generalize from this to most VC-backed (or seeking) businesses... and another thing still to compare the massively larger set of small businesses started by individuals without major external funding. Different kinds of firms face incredibly different pressures and failure modes at every stage.
More honestly it is "Technical people can make great startup founders, but first filter on if they can recruit one other person to work with them." In any team of two, most of the time there was one person that had the idea and drive and asked the other to join them. A technical person with this type of skill, that is willing to spit the ownership of a company with someone else, is much more likely to have the skills and talents to run a high growth startup than someone who has not recruited their first person to join them.
I would imagine that when interviewing a pair of founders, whether consciously or not, people place one of them into the CEO role and the other into the CTO role. Don't most startup teams split up work like this pretty quickly?
I never talked to him after that, sometimes I wonder if he made any money having been so early consumed by Blockchain. It was an immensely valuable lesson for me in the absurdity of Silicon Valley and its false signaling mechanisms.
I believe a lot of YC applications have founding teams in name only, or with bad selections, purely to appease this desire to have more then one founder. In aggregate it may work out, but in my experience...
No, investors prefer two or more founders because it dilutes the power of any individual and makes it easier for investors to play founders against each other and water down the influence of either of them. It makes investors much more influential.
As in all complex behavior, there is not "one reason" for anything and I could have better stated it as: "I think 60% of the reason Y-combinator liked to see two or more founders is that at least those two people are willing to work with/for each other. Other people saw Y-Combinator's success and followed their example (including Y-Combinator)."
It would be pretty cool if people started giving percentages to causal factors when discussing complex events. It would be a concise way to get a much more useful understanding of their opinions.
==According to the researchers, ignoring other factors, solo founders are 2.6 times as likely "to own an ongoing, for-profit venture" than teams of three or more co-founders.==
The non-technical cofounders who become VCs want to support people who remind them of themselves in the past.
This is why founder dating is like dating at a tech school. There are many non-technical cofounders who bring nothing to the table except the desire to make a huge amount of money. That is something to work with, but it is by no means enough in a world where billions of people are hungry.
I've found this pattern of human thinking to repeat itself in countless places in my life. From politics to programming and everything in between, systems look like unusable chaos when you don't understand it and have not been able to derive a controlled benefit from it. Once you learn how to use it, everything falls into place, and you immediately see how blind others are to the system as you now understand it (the curse of knowledge).
Working with people effectively is a skill, and one as rare as competent programming. And when you don't know how to do it, it looks useless or arbitrary.
Will switching from framework X to framework Y really increase my productivity? Is it a matter of not understanding how Y is so much more efficient to build thing than X or is it just hyperbole/marketing/cult. Switching to different product management software, different game engine, different 3d software, different wiki system, etc etc .. How can I know. If I believed everyone I'd be switching every week.
The lack of knowing you reference is exactly what I'm riffing on here. There are people who have leveraged Lisp features to huge benefit, and there's just no easy way to explain those features to people who don't use Lisp. "There's no way to say it in that language". To outsiders then, Lisp looks like a back-patting cult with no tangible benefits and yet an air of elitism. Similarly, those with "people skills" can't always explain the mental framework and skills they've built up to make themselves excellent at working with other people, but they can easily recognize those skills in another.
EDIT: Here's the article.
The whole thing is well worth the read, but for what I'm talking about here, you could skip down to read about the Blub paradox.
This idea reminds me of things developers say to disparage anyone who operates on a higher abstraction layer than they do (e.g. Rust sucks cause it's not C. Ruby sucks cause it's for beginners. Salesforce sucks cause it's not real programming.)
It is a black comedy to see how many salesmen could not sell, how many recruiters cannot recruit, how many businesses recruit people at great expense to lose them because they use them in a boneheaded way, etc.
I've seen many people who think they are working at a high abstraction level while they are really ignoring a large number of inconvenient truths.
Given that so many businesses need web sites that are a variation on a theme I wonder why there isn't an accelerator that has a captive dev shop that is highly productive making e-commerce sites that are variations of a theme based on a fixed framework.
I need to start coming up with filters to weed the grifters out. Spending 10+ hours on a homework assignment only to find something important wasn't communicated is getting old.
So maybe it's non-technical cofounders implementing a vicious cycle of grifting off the technical people, I think it's more likely it's just due to the fact that we have pervasive negative stereotypes surrounding technical people's ability to do non-technical things.
It turns out that doing "sales/marketing/everything else" is of significant value when building a business.
And all the marketing skills in the world don't mean jack if you have nothing to sell.
A technical founder who can create a product and market it with average efficiency can still be successful, unlike a non-technical sales guru with no product.
So I'd say the technical person is till the more important one.
P.S We're also ignoring the fact that many technical founders are also great at marketing themselves. Unlike a non-technical one, who isn't technical by definition.
The only argument I can think of against what I just said is that the other person is not heads down building so they have more time to acquire those skills.
Dollar amounts between salespeople are really only comparable within a given company and maybe not even then taking into account different territories, product lines and times.
Technical people as not stupid and can delegate that "recruitment" thing you pushed to front before us. I also would like to see something akin to the research we are talking about in the defense of your "much more likely to have skills to run a high growth startup".
High growth startup is of interest for investors, mainly. And that's why they prefer several cofounders, because it is easier to divide and control what can be divided. Single founder cannot be divided (except for medical conditions), two can be.
If you are able to recruit founders to work with each other, you didn't prove anything that couldn't be just as easily proven by recruiting a VC to invest in you.
And if it's not sales/hype that we're trying to prove, but instead a technical review by a potential co-founder, then that's what technical due diligence is for.
To me, a much better test is whether or not they've managed to get a believable proof of concept or even actual traction all by themselves, without any help and without even a co-founder.
That is a much better proof point. (leaving out of the discussion other salient points like market size, growth rate, etc)
Being able to attract another idiot who might not know anything at all about the problem domain, or gets excited about it for a few weeks or months, or "joins" five different startups in six months in the hopes that one of them gets funded.. this proves nothing of value.
Convincing a VC to fund you at reasonable terms? Much harder than finding a pliant co-founder if you have even mediocre skills at marketing/sales.
The real reasons VC's want multiple founders aren't really talked about, because they're not flattering to VC's:
Eh, I think this is spurious. The specific post you're replying to is about a signal that seed funders can use to predict if founders have what it takes.
Seed funders can't really use the signal of "did they get VC money?"
Also, technical proof of concept is definitely a positive signal, but is not at all sufficient to make a reasonable investment bet.
That's a fair point, but my point was really: if they can convince you as an investor to actually put in money, then they certainly have sales skills that outclass those of acquiring some random co-founder. Admittedly, maybe they don't have the technical skills, or perhaps you as an investor lacks the specific skills to evaluate those in the way that a potential co-founder might be able to, but (as I mentioned) that's what technical due diligence is for anyway.
> Also, technical proof of concept is definitely a positive signal, but is not at all sufficient to make a reasonable investment bet.
I don't see what you are saying. Are you saying that getting a co-founder is more sufficient than a technical proof of concept to make a reasonable investment bet? I wasn't arguing that one should make an entire investment based solely on one factor (the product itself).
My point is simply that: being able to sell a co-founder on the idea or product seems to be an easier lift than selling an investor to invest real money in the idea or product, irrespective of other factors.
One of the recent speakers was Kent Collier, CEO of Reorg (https://www.crunchbase.com/organization/reorg-research#secti...), an information service to the buy-side that focuses on arcane and opaque information, particularly bankruptcy. They are a smash hit that only took $1.3M in financing that now does $1M a week in revenues.
His view is that solo founders and preferable. The reason he gave was that it takes such a clear and unambiguous vision, with total dedication to that vision, that any space between multiple founders creates drag and can kill the startup.
This is very true. For most startups building a product is not just an ongoing engineering/business development task as much as it is an ongoing product development task. Your vision of the product (if you have one) is something that is most difficult to share with others. I think a great entrepreneur is closer to being an artist than to anything else: imagine two painters trying to create one painting at the same time. At times it can get as absurd.
That is not to say you don't need co-founders but maybe, just maybe, sometimes one of the founders needs a slightly dominating position in defining (and refining) the product in the process.
Questions around skills, again, depend on the scenario. I might be an engineer but I sell online and don't need "sales skills" so don't need a co-founder. In other companies, the need for certain skillsets which I don't have needs a co-founder who can give your business the bandwidth.
I can't honestly see that either way is always preferable - depends on the person, the company, the market etc.
>The research is based on a survey of creators for thousands of Kickstarter projects between 2009 and May 2015.
From the paper:
>This suggests that the taken-for-granted assumption among scholars that entrepreneurship is best performed by teams should be reevaluated, with implications for theories of team performance and entrepreneurial strategy.
The claims in the paper are pretty limited and based on a questionably representative sample. Extrapolating to "solo founders are better" seems like a leap at this stage. The results seem interesting and worthy of further evaluation, though!
This is important for VC businesses, where hiring quickly is the only way to grow. But it's not important for smaller businesses, where cash management matters more.
If you have a smaller business making enough money and don't want to scale and therefore don't need VC money - then selling is definitely the number one requirement.
It stops being relevant once you find your 1st customer.
Some startups go bust when they are launched in an unfavourable climate - sometimes the tech is too raw, othertimes the market is just not ready. Move them a couple of years before or after and they take off. Lots of startups which take off, dont keep the momentum - market forces disrupt startups a lot more than the other way around.
When a startup takes off, often for no fault of the founders/co-founders - it creates a strong incentive for the founders to keep aligned and work together. If a startup does not take off it creates a strong incentive for founders to NOT work together.
Often when a startup takes off - or if it raises a big round from a huge VC it creates a strong signal for co-founders to get on board. Case in point is dropbox - they got accepted into YC and it allowed the founder to 'hire' a co-founder.
so you optimize for the variables you CAN control.
I had a partner very early on, and it didn't work out. And it was really nice having someone on board that really cared about success the same way I did. Not an employee, client, friend or family member. But another "me" as part of the group.
If I could go back in time, and truly fix the problems, I would rather have kept my co-founder.
Also, they end with this, so maybe there is more to this story.
>...are already working on their next paper, which looks specifically at co-founding teams, and what factors determine their success and failure.
In retrospect, I really really wish I had been more patient and actually tried to encourage him and get him back on track.
I learned a valuable lesson from this though, to not let my temporary grief blind me to other people's distress.
Also, they didn't define success. I bet it was just getting the project funded. The bar for VC success and Kickstarter are very different. Kickstarter doesn't have growth and ROI requirements. This might be a proxy for a lifestyle business, but not VC funded companies.
It's mentioned in the paper. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3107898
> First, we examine continuation of business operations at the time of the survey (The options were: “Still in operation as an ongoing for-profit business,” “Still in operation as an ongoing not-forprofit, artistic, or other type of endeavor,” “Still in operation, but acquired by/merged with another organization,” “Not operating as a result of being acquired by/merged with another organization,” “Not operating, temporarily stopped operations,” “Not operating, permanently stopped operations,” and “Not operating for another reason.”)
> We also used reported non-crowdfunding revenue based on a 12-point categorical scale ranging from none to over $10 million, using this as a direct measure of company success.
> The first model is an unconditional model, and reveals that solo founders do no worse with respect to average income than teams of three or more.
If you must have a co-founder, makes sure he works as long/hard as you do.
I do think though this is all entirely dependent on the scope of your project.
I've been working on a small bootstrapped service. There have been some long hours, but nothing too crazy. I've also taken a few breaks to do some contract projects (I'm actually looking for a new project now, and you can find some links in my HN profile.) I'm working on a fairly niche product, so I think I can afford to go at a slower pace and not have any cofounders.
Sometimes a startup idea does require a team and some VC funding. Those ones are far more risky and have a lower chance of success, but it's a totally different game.
* The most contentful working time for me was when I had a co-founder. It was good to bounce ideas off someone, and having another person with equal share in the business increased accountability and my motivation to keep pushing.
* The most effective working time for me was as a solo-founder. I felt that I wasn't compromising every decision I made to keep my co-founder happy, and that I could make decisions much more quickly and change direction whenever I wanted.
I think the main problem with the time with a co-founder was that we were too similar. We worked great together and got on well, but there wasn't that spark that pushed the business forward. Since being on my own again and pushing against the limitation of my own personality and abilities, I have managed to grow the business trifold since my co-founder left.
Solo technical founder. Hired my first sales employee long after I established a product-market fit, got a few paying customers and $300K in annual revenue. I gave him a co-founder title, but we were never equal. It was one of the best decision that I have made. The company would not have been able to survive if 2 of us were equal - we would have gone out of business. Instead, 1 year after I pushed him out we had a moderately successful exit (8 figure).
I think that having a solo founder is beneficial AS LONG AS that one person is great. Otherwise you, as a VC, kind of bet that at least 1 of them will be great and it will all work out.
The trend of having 2+ founders is a compromise and a result of BS mumbled by VCs.
A downside is during those times when you work less, little happens.
hmmm... co-researchers to research on NO need of co-researchers/founders...
In a world where you're swinging for the fences, this model would still argue for teams.
- define the product
- build the product
- sell the product
So what would be my take-away; if you are thinking of pursuing a business, and have the energy, contacts and network to make it, go ahead. However if having help from a valuable co-founder who you trust is possible, then compromise, and get a helping hand. Otherwise is better to go it alone.
It is true in many ways, not just Kickstarter.
10. Sometimes (perhaps rarely) a better idea comes from a group.
9. There really is a lot of work to go around.
8. If one of the founders is willing to sell, take more investment or worse terms, perhaps they can apply pressure to the ones who are reluctant.
7. Most humans like to be around other humans, so cooperation is the norm among people who self-group.
6. Expertise can be complementary and allow a natural division of labor in the early days.
5. Hard feelings are more evenly distributed as the founders get pushed out or diluted one-by-one; push out the weakest contributors and least resistant first.
4. More founders = reduced risk and decreased dependency on one possibly loose cannon
3. If the board stops getting along with one founder, perhaps another will be a better fit. (see: Twitter)
2. Multiple complementary founders are rarely of one mind, and therefore it's easy to split control.
.. and the number one reason why VC's like multiple founders:
1. Extra founders cost them nothing
Agreed, but I want more than one Elon Musk